A key source of foreign currency for Pyongyang, generating some $100 million (£66 million) each year, it has never been closed, weathering the aftermath of the 2009 nuclear tests and the shelling of Yongpyeong island the following year.

However, North Korea's decision to block workers and supply trucks from entering the site casts doubt over Kaesong's future security.

North Korea said the 861 South Koreans who were at the site on Wednesday were free to return home, but with no replacements arriving for their shifts, only 33 did so.

"Our workers are on standby to return," said the boss of one factory on the site, who asked to remain anonymous for fear of offending North Korea. "If the situation continues, however, our business will be affected. I am afraid buyers will worry [that our goods will not come out of Kaesong]," he added.

Kim Kwan-jin, Seoul's Defence chief, said if hostages were taken at the site, South Korea would consider military action to free them.

Two US B2 stealth bombers flew over the Korean peninsula

The army has practised an annual drill, called Ulchi Freedom Guardian to free hostages, according to Yonhap, the South Korean news agency.

"Special forces will conduct the operation along with military and government officials in case of crisis," a military official told Yonhap.

However, experts said it was almost unthinkable that South Korean soldiers would storm the border. "If North Korea puts Kaesong workers into danger, military operations should be considered as a last resort," a senior government official told Yonhap. "We should pressure North Korea through diplomatic means."

Workers emerging from Kaesong on Wednesday said production was continuing.

"There seemed to be nothing different at Kaesong, although customs officers at the border wore uniforms and more soldiers were seen," one textile worker named Roh said.

He added that a greater concern, with supply trucks blocked, is whether the complex runs out of food. South Korea applies for permission to enter Kaesong on a daily basis, and North Korea has not indicated how long the ban will continue.

A spokesman for the Unification ministry noted that North Korea has yet to take any unprecedented steps as it ratchets up press on the international community. He said access to Kaesong had been cut on three occasions in 2009 during the annual military drills between the US and South Korean armies.

France, meanwhile, called on China to rein in North Korea. Laurent Fabius, the French Foreign minister, said China had "power over North Korea" and that he would travel to Beijing next week to discuss the situation.

Senior American officials remain relaxed about the situation, predicting that North Korea will back down after this year's military exercises conclude.

"The North Koreans want the international community to feed their people, fuel their factories and fill their bank accounts," one official told the New York Times. "If North Korea were a self-sufficient enterprise, we would have a much bigger problem on our hands."